Aussie Home Prices expected to fall 5%!
Good news for those who have been waiting for the property market to settle before buying.
Senior analysts at IBISWorld have predicted that Aussie home prices will fall by 5.2 per cent between 2022-23. Some locations, such as those in Sydney’s innermost suburbs could even drop by more than 9%.
In 2021-22, we saw Australia’s largest annual property increase in history, with housing prices surging by 18.1 per cent. For many Aussies, this meant delaying the purchase of their first, or a new home.
What does this mean for lenders?
Much of the property boom can be accounted for by record-breaking low interest rates through the COVID19 pandemic, with the Reserve Bank of Australia slashing the cash rate to 0.1 per cent, according to this 9news article.
Now, on our way out of much of the pandemic-led destruction, inflation is rising rapidly. Due to this, the central bank may be forced to raise interest rates earlier than expected by many homebuyers who entered the market during the pandemic.
"Pressure from other overseas reserve banks may prompt the RBA to raise the cash rate in 2021-22, but certainly in 2022-23," said IBISWorld senior industry analyst Matthew Reeves.
The analysts also say that tighter lending standards will likely “… exacerbate rising mortgage rates.”
How to finance your next home purchase
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